3. CONSOLIDATED VARIABLE INTEREST ENTITIES

FASB Accounting Standards Codification (“ASC”) Topic 810 — Consolidation (“ASC 810”), provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIEs. Generally, the consideration of whether an entity is a VIE applies when either: (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest; (2) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support; or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The Company consolidates VIEs in which it is considered to be the primary beneficiary. The primary beneficiary is the entity that has both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the VIE’s performance; and (2) the obligation to absorb losses and right to receive the returns from the VIE that would be significant to the VIE. The Operating Partnership is a VIE and as such, substantially all of the consolidated balance sheet is a consolidated VIE. In addition, the Operating Partnership consolidates two collateralized loan obligation (“CLO”) VIEs with the following aggregate balance sheets ($ in thousands):



	June 30, 2018		December 31, 2017
	Notes 4 & 8		Notes 4 & 8

Mortgage loan receivables held for investment, net, at amortized cost	$	861,209	880,385
Accrued interest receivable	4,360		4,252
Other assets	21,860		—
Total assets	$	887,429	$	884,637

Senior and unsecured debt obligations	$	691,312	$	689,961
Accrued expenses	1,463		794
Other liabilities	2		—
Total liabilities	692,777		690,755

Net equity in VIEs (eliminated in consolidation)	194,653		193,882
Total equity	194,653		193,882

Total liabilities and equity	$	887,430	$	884,637